When federal agencies impose regulations on businesses, who decides what those rules actually mean? In a recent decision, the Supreme Court said that agencies do.

In Decker v. Northwest Environmental Defense Center, the Court examined whether the Environmental Protection Agency (EPA) reasonably interpreted its regulations when concluding that permits were not required under the Clean Water Act to discharge storm water runoff from logging operations. The Court – ruling that the EPA’s interpretation was reasonable – affirmed the principle that courts should defer to an agency’s interpretation of its own regulation unless that interpretation is plainly erroneous or inconsistent with the regulation.

The dispute in Decker arose following the actions of logging and paper-product companies in Oregon. Under a contract with the state, Georgia-Pacific West and other logging companies harvested timber from a state forest using graded roads to transport the timber. When it rained, water from those roads – often filled with sediment, dirt, and crushed gravel – ran off into nearby rivers and streams.

In September, 2006, the Northwest Environmental Defense Center (NEDC) filed suit in the United States District Court for the District of Oregon, alleging that the logging companies caused discharges of storm water runoff into two waterways and had not obtained the necessary permits to do so under the Clean Water Act.

The District Court dismissed the action, concluding that the discharges were permissible, but the Court of Appeals for the Ninth Circuit reversed.

The Supreme Court granted certiorari to address the question of whether the EPA’s interpretation of its own regulations – that permits are not required for discharges from storm water runoff from logging roads– was reasonable.

The Clean Water Act requires a permit if storm water runoff “associated with industrial activity” is discharged into navigable waters. The EPA, the agency responsible for enforcing the Clean Water Act, issued regulations defining “associated with industrial activity” as only those discharges “directly related to manufacturing, processing or raw materials storage areas at an industrial plant.” The EPA later interpreted storm water runoff from logging roads as excluded from this definition.

In a 7-1 decision, the Court sided with the EPA, concluding that the agency’s interpretation was reasonable and therefore entitled to deference under a previous Supreme Court decision in Auer v. Robbins.

After noting that jurisdictional issues did not preclude the courts from hearing the case, the Court turned to whether the EPA’s interpretation of “associated with industrial activity” was reasonable.

First, relying on the general rule enunciated in Auer that courts should defer to an agency’s interpretation of its own regulation unless that interpretation is “plainly erroneous or inconsistent with the regulation,” the Court concluded that while the term “industrial” can refer to business activity in general, the term also might apply more narrowly to the manufacture of goods in factories, which does not include outdoor timber harvesting.

Second, the Court determined that the EPA’s interpretation that the regulation extends only to traditional industrial activities was rational and therefore permissible.

Finally, the Court concluded that the EPA “could reasonably have concluded that further federal regulation in this area would be duplicative or counterproductive,” given the backdrop of extensive state regulation of storm water runoff from logging roads

Although the Court acknowledged that the EPA’s interpretation might not necessarily the best one, it noted that the interpretation was consistent with the regulation and therefore entitled to deference.

Justice Scalia, disputing the majority’s deferential approach, argued in dissent that the Court should not grant such discretion to federal agencies. He asserted that Auer should be reconsidered because no persuasive justifications exist for affording federal agencies both deference in creating regulations and interpreting them. In its place, Scalia suggested the Court should instead determine whether the agency’s interpretation of the regulations was the most fair.

Justice Stephen Breyer did not take part in the decision because his brother, a judge in the United States District Court for the Northern District of California, sat on the Ninth Circuit panel that had decided the matter under review.

Last week brought closure to a rather interesting legal
controversy at the northeastern corner of the country. The St. Croix River, which forms part of the
boundary between Maine and Canada, once supported millions of alewives (also
known as river herring). Dams and
pollution decimated alewife runs throughout the northeast, but by the mid-1990s,
the St. Croix run had partially recovered.
That recovery alarmed local fishing guides, who blamed the alewives for
declining smallmouth bass populations.
In response to these concerns, Maine enacted legislation requiring
closure of a key fish ladder. With the
ladder blocked, alewife populations again declined precipitously.

This second decline eventually led to both litigation and
legislative activity. On the litigation
front, the Conservation Law Foundation, a regional environmental group, began
by suing EPA. CLF argued that the state’s
actions constituted a de facto amendment of water quality standards for the St.
Croix, and that EPA was obligated to review that change. That suit culminated in an EPA letter to the
state of Maine, in which EPA concurred in CLF’s position. But the state initially brushed off the
letter, and it appeared that CLF would need to file another lawsuit to compel
state action. CLF did file that lawsuit,
but the suit raised a host of jurisdictional issues, some of them quite
thorny. As thoroughly explained here,
bringing lawsuits to compel compliance with water quality standards is no easy matter. Those jurisdictional issues now have been briefed
but not yet addressed by the court.

Now, however, those same issues are moot. The state legislature recently passed a bill
requiring the reopening of the fish ladder.
The legislation had broad support: Native American tribes and commercial
fishing interests joined environmentalists in support of the bill, while only a
few fishing guides remained opposed.
That alone was no guarantee of gubernatorial support. Maine’s governor spent part of last week
speaking at an anti-Agenda 21 rally, and when it comes to pro-environmental
legislation, all bets are currently off.
But even if he could not bring himself to sign the bill, the governor also
declined to veto it, and last week the bill quietly became law.

So why should anyone outside of an obscure corner of Maine
care? There are three main reasons. First, this controversy highlights intriguing
questions about EPA’s obligation to review state actions that serve as de facto
amendments of water quality standards.
Many state actions arguably could meet that description. Installing a board in a fish ladder, and thus
preventing fish migration through a river system whose designated uses include
supporting native fisheries, seems like an obvious example. But what about approving subdivisions that
alter stormwater runoff in ways that damage water quality? Could that require EPA approval as well?

Second, the litigation, had it proceeded, would have
compelled the courts to confront some interesting questions about the
enforceability of water quality standards.
And those theories in turn would have implicated basic questions of
federalism. For example, the plaintiffs’
most plausible source of a cause of action might have been the U.S.
Constitution’s supremacy clause. And the
United States Supreme Court recently raised, without resolving, questions about whether
such a cause of action exists.

Finally, and perhaps most importantly, the ecological
benefits of this recovery project could be substantial. Alewives are the anadromous equivalent of
rabbits; they reproduce in astonishing numbers, and just about every predator
that lives in northeastern river systems or the near-shore ocean eats
them. Right now, they’re under consideration for ESA
listing, but a recovered population could help New England’s
iconic, and beleaguered, groundfishery bounce back.

As we drove to school a couple days ago, we were listening to an NPR story about the economy. The reporter was summing up the situations of various regions of the world. As to Europe, the reporter said something like “Europe doesn’t look great either.”

Now my daughter knows a thing or two about Europe. We lived in Spain last year for 6 months. From the backseat, she speaks up in a very deliberate and confident voice:

“Of course Europe doesn’t look great -– there are cigarettes all over the ground!”

This past week I took a trip to Toronto via Cleveland (long story) to attend the Urban Forests, Political Ecologies Conference (which was a truly fantastic conference). In addition to seeing the Cuyahoga River for the first time (a river that makes its way into every intro to environmental law course), I got to
drive through the city of Euclid, Ohio. I felt as if I was living in a case book! Euclid, as many of you know, became famous in the case of Euclid vs. Ambler Realty, where the Supreme Court, for the first time, upheld a municipality's authority to enact zoning regulations. These regulations were ultimately an exercise of the police power intended to preempt nuisance claims by separating well-recognized nuisances (like industry) from those who might bring claims. Well, as I traveled down the main drag back toward the interstate, what filled the windshield of my car but one of the largest windmills in North America. That's right, Euclid was at it again. Innovating. From the same grid upon which modern zoning was built, you could now view a growing source of alternative energy in the U.S. I snapped a picture, shown to the right, and as you can see this is no slight change to the Euclid skyline (it appears, however, that Euclid has not mandated underground powerlines through its zoning power).

The mayor of Euclid hopes this is the beginning of Euclid's renewable energy revolution, and Euclid has indeed followed up by placing solar panels on city buildings. The turbine is poised over Lincoln Electric's headquarters and is expected to cut a half a million dollars from Lincoln's annual electric bill. Of course, just as with complaints about zoning regulations in 1926, the city has received complaints about the turbine obscuring views of Lake Erie. But overall, residents seem quite happy with the attention the windmill brings, and with the potential for future investment in windmill manufacturing for a region in great need of re-investment in growth industries.

Of course, the case of the city of Euclid provides an interesting metaphor for the broader intersection between zoning and renewable energy. As Professor Troy Rule has explored in many fine articles, municipalities may often use zoning authority to keep renewable energy projects out of their municipal limits. In this way, the city of Euclid provides a wonderful example of a city embracing such projects - and not just a project on the fringe of the city limits, but one that can be seen from pretty much any street in downtown. Hopefully more municipalities will embrace Euclid's vision of what is not a nuisance in a time when renewable energy is in need of major adoption across the 88,000 or so subnational governments across the nation. And maybe they can do something about those powerlines too.

We’re happy to introduce our newest blogger. Todd Aagaard attended the University of
Michigan’s School of Natural Resources and the Environment and Michigan Law
School, where he was the editor-in-chief of the Michigan Law Review, and
clerked for Judge Guido Calabresi. He then
spent eight years at the United States Department of Justice, where, last I
checked, his former colleagues are still in mourning over his departure. He now is an associate professor at
Villanova, where he teaches and writes on a variety of environmental law
topics.

Todd will be joining us for a three-month stint, which is
part of a series of changes coming to the blog.
In the future, we anticipate that some of our editors will remain
indefinitely, while others will rotate through for shorter visits.